The implications of pay range transparency on job application preferences and negotiations.

What is it about?

Pay transparency laws require employers to post salary ranges, but most offer little guidance on how wide those ranges should be. Our research finds that this has implications for gender equity. Because women tend to be more risk averse, they show a stronger preference for jobs with narrower salary ranges—and choosing a narrower range is in turn associated with less assertive negotiation behaviors, including lower counteroffers. The result is a cycle in which range width can shape who applies and how they negotiate. Providing applicants with brief context about typical starting pay and how offers are determined substantially reduced these gender differences.

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